People Who Live In The Past May Be Better With Money

Friday

Jul 18, 2014 at 4:26 PM

Libby Kane

A quick perusal of Pinterest will extol the virtues of living in the moment.

But one new survey recommends doing just the opposite.

Financial website Magnify Money, working with Philip Zimbardo, professor emeritus of psychology at Stanford University, surveyed 500 people in each of six countries (3,000 total) to gauge their financial health, financial literacy, and perspective on time.

"There is a high degree of correlation between a person's approach to time and their financial health," the survey concluded. In fact, your approach to time is more important for your money than your degree of financial literacy. (You can take the survey used to measure time perspective at Magnify Money.)

People who are stuck in the past, Magnify Money concluded, may be "once bitten, twice shy," and conservative with their money. Those who have positive memories and recollections of that time are least likely to be financially "sick."

Those who live in the present, on the other hand, are more likely to make impulsive decisions with potentially serious ramifications — and impulse is rarely a good thing when it comes to money.

People who focus on the future are good about setting themselves up for success, but are actually more likely to make bad financial decisions (like bad investments or expensive insurance) when they don't have reliable information.

The researchers also found that financial literacy and financial health aren't as closely related as you might expect. Not only do people who rate themselves as highly financially literate fail to show a correlation in their financial health, but even those who demonstrate "a high degree of financial acumen" aren't reliably in good financial health.

And finally, it found that millennials think they're less financially literate than Baby Boomers but are, in fact, financially healthier.

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